All change for wills and intestacy?
Challenging the intestacy rules: With a raft of changes to the intestacy rules coming come into force we ask whether the reforms go far enough and look at how you can go about challenging the intestacy rules.
Note: Since this article was first published there have been further legal changes to this area of law. For instance the 'statutory legacy' has been increased from £250,000 to £270,000 as from 6 february 2020. It is therefore important that you take expert up to date advice from a specialist solicitor if you are thinking about challenging the intestacy rules.
Challenging to the intestacy rules
We are often consulted by people who are shocked that the intestacy rules fail to make financial provision for them when a loved one dies without making a will. When this happens we look at the options for challenging the intestacy rules. This can be done under the Inheritance (Provision for Family and Dependants) Act 1975.
The new changes to the intestacy rules are to be welcomed as they treat a spouse (or civil partner) more generously than previously. Furthermore, the statutory legacy will increase over time. Schedule 1 of the Act provides that, at least every 5 years, the Lord Chancellor must specify, by statutory instrument, the amount of the statutory legacy. The Lord Chancellor’s obligation to review is also triggered if the Consumer Prices Index has risen by more than 15%. In theory therefore the statutory legacy should not fall behind the real level of inflation. However, dependants will continue to suffer hardship and when this happens we are here to help with the process of challenging the intestacy rules.
For free initial guidance on challenging the intestacy rules call our legal helpline on 0808 139 1596 or send us an email at firstname.lastname@example.org
The new reforms also resolve a number of areas of ambiguity in respect of claims under the I(PFD)A 1975, such as whether a claim can be commenced prior to a grant of representation being issued. Crucially, it extends the definition of ‘child of the family’, so that it now includes a single parent family. Previously, the child had to be a child of a family in relation to a marriage or civil partnership to which the deceased was a party, but the Act has now been extended to include any person who was treated by the deceased as a child of any family in which the deceased had a parental role. This is likely to have far reaching consequences for grandchildren who have been raised as the child of the deceased. The new provision makes it clear that they can pursue claims under I(PFD)A 1975.
Claimants who have been ‘maintained’ by the deceased will benefit from the removal of the ‘balance sheet’ assessment. Previously they had to show that the deceased contributed more than the claimant did in order to prove they had been maintained. The amended s 1(3) requires the claimant to simply establish that the deceased had been making a substantial contribution towards their reasonable needs. Contributions made between people within a domestic context will no longer be weighed against one another.
Are further changes to the intestacy rules required?
There is an underlying concern that the reforms do not go far enough to take account of the changing circumstances of modern family structures in 21st century England and Wales.
Both the rules of intestacy and family provision under I(PFD)A 1975 continue to be out of step with what is happening in society at large. The reforms fail to fully recognise that many couples prefer to co-habit and have children without marrying. These families in particular will continue to suffer injustice under the new regime. Our current advice to people about the need to have a valid will, therefore, remains the same. This is particularly critical for people who co-habit and have children without marrying.
What are the implications of these intestacy rule changes?
ITPA 2014 clarifies that a claim under I(PFD)A 1975 can be issued prior to the grant of representation. This was previously an area of ambiguity. It is a frequent problem in day-to-day practice, which sometimes results in the need for practitioners to issue a citation forcing the personal representative to take out the grant so that a claim can then be issued.
An application to sever the deceased’s share in jointly-owned property, under I(PFD)A 1975, s 9, can now be made after the six-month time limit, as can applications to extend limitation under I(PFD)A 1975, s 4.
The increase in provision on intestacy for spouses and civil partners means many more children and other family members will be excluded from their parents’ estates under the intestacy rules. This could see a rise in claims by children under I(PFD)A 1975.
I(PFD)A 1975 claims by those who were maintained by the deceased will also require additional analysis, as practitioners will need to consider whether the deceased assumed responsibility for the claimant and the extent of that assumption of responsibility.
What risks are likley to arise following these changes to the intestacy rules?
Where wills are drafted following the commencement date, the will drafter must bear in mind some crucial points:
• the definition of chattels under the Act is shortened. There is no longer a prescribed list set out by the Administration of Estates Act 1925, s 55(1)(x). ‘Personal chattels’ now means ‘tangible moveable property’, with some stated exceptions. Those preparing wills need to be aware that in more valuable estates where there may be collections of antiques or art etc which the testator/testatrix may wish to pass alongside his other personal possessions may in fact be excluded from the definition of personal possessions
• clients without a valid will need to be made aware of the changes to the intestacy rules and the impact on parents and siblings where the deceased dies leaving a spouse or civil partner, but no issue
• similarly, care also needs to be taken where someone has separated from their spouse but has not yet divorced as the surviving spouse’s share of the estate is now materially greater than it was under the old rules
• clients should be advised to give more careful consideration to those who may be regarded as a dependant or a child of the family so they can outline their reasons for excluding them from a will which could be relevant evidence in any defence to a claim made under I(PFD)A 1975
Are there any trends emerging in the law in this area?
There are many couples who co-habit and have children without marrying or entering into a civil partnership. This trend, together with the number of people who die intestate, creates a huge number of potential claims under I(PFD)A 1975 involving people who have lived with the deceased as husband and wife for at least two years prior to the date of death, or were financially dependent upon them. Children who are born out of wedlock also creates a number of issues in respect of paternity where the deceased is not named on the child’s birth certificate. The developments in this area in terms of legislation do not, as yet, provide for these loopholes.
If you are looking for expert guidance on challenging the intestacy rules call us on freephone 0808 139 1596 or send an email to email@example.com